Ruling puts local funding at risk

The Gillard government has drawn up a hit list of funding programs across every government agency and department potentially at risk as a result of a High Court decision.

Last year, cabinet ministers were asked to provide a list of all programs that could be invalidated by an adverse decision in a challenge to funding for school chaplains.

It is understood nearly every department and agency identified programs – worth billions of dollars – that were at risk. The list included funding for housing, local councils, roads and hospitals.

On Wednesday, the High Court upheld the challenge to the chaplaincy scheme finding because there was no legislation authorising the Government to enter into the funding agreements with the Scripture Union of Queensland.

But the decision may go further and affect programs with legislative backing, in cases where the Parliament does not have the constitutional power to pass the legislation.

“It does change a range of assumptions that our government and previous governments have made about expenditure," Federal Attorney-General
Nicola Roxon
told the ABC.

“Obviously, once this decision was being challenged we looked at the contingency arrangements that should be in place. It is serious and it is a change from the previous decisions of the Court."

Victorian Premier
Ted Baillieu
admitted the High Court ruling challenged long-standing funding arrangements between the Commonwealth and the states.

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“This decision challenges the nature and the way that the executive power is being delivered or undertaken in relation to the funding of programs," Mr Baillieu told ABC Radio on Thursday. “We should not leap to conclusions just yet but it does challenge, in principle, some of the basic relationships we’ve developed [with the Commonwealth] over the last couple of decades."

Queensland Premier
Campbell Newman
said he was still looking into the potential impacts of the decision.

But the former Brisbane lord mayor, who has in the past been an active supporter of direct funding to local government, said states should have a greater say in where the federal funding goes.

“It was time that the Commonwealth respected the Constitution and treated states as partners in a federation rather than seeking to dictate one size fits all, centralist policies from Canberra."

Education ministers in Queensland, Western Australia and South Australia said they were keen to keep the school chaplaincy program going, despite the High Court ruling, even if it meant altering the funding mechanism.